Rent vs Buy Calculator
Runs locallyInput stays in your browserFree, no sign-up
Renting versus buying arguments usually fail because the two sides are not measured the same way. Comparing only the mortgage payment with the rent leaves out three things: the home appreciation, the yearly cost of owning (maintenance, taxes, insurance), and what the money saved by renting could grow into if invested. This calculator runs a month-by-month simulation on one shared footing. On the buying side, you pay the mortgage plus owning costs each month, and end with the home value minus the remaining loan balance and selling costs. On the renting side, you start by investing the down payment plus buying costs, then invest each month savings whenever renting is cheaper — and when buying is cheaper in a given month, the savings are credited to the buying side the same way, so neither side gets a free advantage.
Three kinds of people use it most. First, someone house-hunting right now: plug in the price an agent quoted and the rate on offer, set the years you expect to stay, and see how far apart buying and renting end up after ten years before deciding whether to buy or keep renting. Second, someone holding a down payment but hesitating: nudge the appreciation and investment-return assumptions and watch where the verdict flips — if a small cut in expected appreciation flips it, the purchase leans heavily on appreciation. Third, someone advising family or friends: run both sets of numbers and let two figures — end-of-stay net worth on each side and the break-even year — do the talking instead of gut feeling.
The model limits come first. It includes no country tax rules, subsidies or purchase restrictions, and those vary widely, so treat the result as a like-for-like comparison, not the whole decision. Appreciation and investment returns are assumptions, not forecasts: the past rising does not mean the future rises, which is why both are exposed as inputs — move each by two points and see whether the verdict survives. Owning costs are estimated as a percentage of the price; a home with major repairs, unusual insurance or high association fees needs those added separately. The mortgage payment uses the equal-installment formula, the most common default; equal-principal borrowers can approximate with their average payment.
The result shows four figures: renter end net worth, buyer end net worth, the gap between them, and the break-even year, plus a breakdown of the mortgage payment, end home value, remaining balance and selling costs. Everything is computed locally in your browser — your rent, price and other inputs are never sent to any server.
How to use
- Enter monthly rent, home price, down payment and mortgage annual rate; the mortgage payment is computed with the equal-installment formula.
- Enter years of stay, annual appreciation and annual investment return, then yearly owning cost and buying and selling cost rates — the defaults work as-is.
- Read renter and buyer end net worth, the gap and the break-even year to see which side wins under your assumptions.
- Move appreciation and investment return up and down by two points each and check whether the verdict flips before trusting it.
FAQ
Why does the renting side start with the down payment and buying costs?
Fairness. A buyer turns the down payment and buying costs into a house; a renter holds the same money, and the model assumes it gets invested. Leaving it out would silently assume the renter spent the down payment, which tilts the comparison toward buying. In the other direction, months when buying is cheaper are credited to the buying side the same way, so the comparison stays symmetric.
What does the break-even year mean?
It is the first year in which buying end net worth passes renting. The model computes both sides year by year and finds the first year buying pulls ahead. If buying already leads in year 1, the page says buying leads from year 1; if it never pulls ahead during the stay, it says renting leads throughout. Note the break-even year depends on the appreciation and return assumptions — change them and the year moves.
What appreciation rate should I enter?
There is no standard answer and the tool does not preset one: over long periods most markets appreciate near inflation plus a point or two, but cities and years differ wildly. Run it twice, for example at 2% and at 5%: if the verdict survives both, it is sturdy; if it flips, the decision leans heavily on appreciation and deserves more caution.
The payment uses equal installments — what about equal-principal loans?
Equal-principal payments fall month by month and cost less interest in total; this tool uses the equal-installment formula because it is the most common default. If your loan is equal-principal, approximate with the average of the two payment styles, or enter your average payment directly — the direction of the verdict rarely flips on this, though the exact interest saved will differ.
Can I take the result as a buy recommendation?
No. This tool only counts money. It cannot weigh school districts, commutes, housing stability or family plans, and it includes no local tax rules or policies. Use it as a financial worksheet: settle the money question first, then layer the life factors on top; for large sums, talk to a professional.